An EA is an individual who has demonstrated technical competence in the field of taxation and can represent taxpayers before all administrative levels of the Internal Revenue Service (IRS).
“Enrolled” means EAs are licensed by the federal government. “Agent” means EAs are authorized to appear in place of the taxpayer before the IRS. Only EAs, attorneys, and CPAs may represent taxpayers before the IRS. The EA profession dates back to 1884 when, after questionable claims had been presented for Civil War losses, Congress acted to regulate persons who represented citizens in their dealings with the U.S. Treasury Department.
EAs advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements. EAs prepare millions of tax returns in a typical year. EAs have expertise in the continually changing field of tax law, which enables them to effectively represent taxpayers audited by the IRS.
Only EAs are required to demonstrate to the IRS their competence in matters of taxation before they may represent a taxpayer before the IRS. Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all EAs specialize in matters of taxation. EAs are also the only taxpayer representatives who receive their right to practice from the federal government, unlike CPAs and attorneys who are licensed by the states.
An individual must pass a difficult 2-day examination administered by the IRS, which covers taxation of individuals, corporations, partnerships, estates, and trusts; procedures; and ethics. Next, the successful candidates are subjected to a rigorous background check conducted by the IRS.
Alternatively, an individual may become an EA based on employment at the IRS for a minimum of 5 years in a job where he/she regularly applied and interpreted the provisions of the Internal Revenue Code and regulations.
In addition to the stringent testing and application process, EAs are required to complete 72 hours of CPE, reported every 3 years, to maintain their status. Because of the rigor associated with becoming an EA and keeping up with the required credentials, there are fewer than 33,000 EAs in the U.S.
EAs are required to abide by the standards of ethical conduct as published in U.S. Treasury Department Circular 230. EAs found to be in violation of the provisions contained in Circular 230 may be suspended or disbarred.
The NAEA is the key professional organization representing EAs. The principal concern of the NAEA and its members is honest, intelligent, and ethical representation of the financial position of taxpayers before governmental agencies. Members of the NAEA are required to complete a minimum of 30 hours of CPE each year in the interpretation, application, and administration of federal and state tax laws in order to maintain membership in the organization. This requirement surpasses the IRS’ required minimum of 16 hours per year.